Japanese Stocks Advance on Yen, China Manufacturing PMI

Nov. 1 (Bloomberg) -- Japan stocks advanced for a second
day after the yen weakened and official data showed China’s
manufacturing expanded for the first time in three months.
Panasonic Corp. led electronics makers lower after forecasting a
loss 30 times bigger than expected.

Komatsu Ltd., a construction-machinery maker that gets 14
percent of its sales from China, rose 3.1 percent. Nippon Meat
Packers Inc. soared 13 percent on a plan to buy back as much as
15 billion yen ($188 million) in shares. Panasonic plunged 19
percent, the most since at least 1974, to lead declines on the
Nikkei 225 Stock Average.

The Nikkei 225 added 0.2 percent to 8,946.87 at the 3 p.m.
close in Tokyo, reversing a 0.6 percent drop. Volume on the
gauge was more than 10 percent above the 30-day average. The
broader Topix Index rose 0.1 percent to 743.32, with about three
shares advancing for every two that fell.

“There’s expectation that the weakening yen may to a
certain degree put a brake on deteriorating corporate
earnings,” said Toshio Sumitani, a strategist at Tokai Tokyo
Financial Holdings Inc. “China’s manufacturing is supporting
the market.”

The Topix has risen 3.4 percent since Sept. 6 after the
European Central Bank started a global wave of stimulus to boost
growth, with the U.S. Federal Reserve and the Bank of Japan
following suit. Shares on the gauge traded at 0.9 times book
value, compared with 2.2 for the Standard & Poor’s 500 Index and
1.5 for the Europe Stoxx 600 Index.

Yen Weakens

The yen fell to as low as 80.13 against the dollar today in
Tokyo, compared with 79.58 at the close of stock trading
yesterday. Japan’s currency weakened to 103.89 against the euro
from 103.14. A weaker yen boosts overseas income at Japanese
companies when repatriated.

Toyota Motor Corp., a carmaker that gets 25 percent of its
sales in North America, climbed 0.8 percent to 3,090 yen. Roland
Corp., a maker of electronic musical instruments that gets a
third of its sales from Europe, rose 0.9 percent to 540 yen in
Osaka.

Panasonic tumbled by its daily limit of 100 yen, or 19
percent, to 414 yen, its biggest decline in at least 38 years.
The electronics maker reversed its full-year forecast to a loss
of 765 billion yen from a 50 billion yen profit, citing weak
demand and restructuring costs. Analysts surveyed by Bloomberg
News had expected a loss of 24.7 billion yen. The projection for
the second-highest loss in its history prompted Panasonic to say
it won’t pay a dividend for the first time since 1950.

Japan’s earnings season peaks this week, with more than 570
of the 1,676 Topix companies reporting results. Of the 320
companies on the Topix which have reported quarterly revenue
since Oct. 1, and for which Bloomberg News has estimates, 66
percent have missed projections.

China Manufacturing

Companies linked to China rose after an official report
showed the nation’s manufacturing expanded for the first time
since July, adding to signs economic growth in the world’s
second-biggest economy is rebounding after a seven-quarter
slowdown.

The Purchasing Managers’ Index rose to 50.2 in October from
49.8 in September, the National Bureau of Statistics and China
Federation of Logistics and Purchasing said today in Beijing.
That matched the median forecast in a Bloomberg News survey of
30 economists. A reading above 50 indicates expansion.

Futures on the S&P 500 slid 0.3 percent in New York. Most
U.S. stocks rose yesterday as equity markets reopened after a
two-day closure caused by Hurricane Sandy, the longest weather-related shutdown since 1888. A Chicago area purchasing managers’
index showed an unexpected contraction.

Nippon Meat jumped 13 percent to 1,114 yen, the most on the
Nikkei 225, after saying it will buy back up to 7.08 percent of
its shares.